Mail-in rebates seem like such a great deal. Some of these "rebate specials" offer products that are practically free after the rebate is deducted. They're hard to resist, and that is exactly what the marketing teams from retailers and manufacturers are counting on.

Rebate deals are a way to get customers into stores and encourage them to spend. Even better, the companies know they often won't have to pay out that rebate money at all. According to ConsumerAffairs.com, more than $500 million in rebates go unclaimed every year.

Key Takeaways

  • Instructions to claim a rebate can be deliberately fussy, confusing, or difficult to fulfill.
  • Expiration dates are purposefully unrealistic.
  • Some rebates just never arrive.

"Between 40% and 60% of rebates are never redeemed," says Edgar Dworsky, founder and editor of ConsumerWorld.org.

Companies ensure that the redemption rate stays low by making it as difficult as possible for consumers to claim their rebates. Here are some common tactics.

Multiple Rebates for the Same Item

An offer of more than one rebate on a single product seems like a jackpot. In reality, the process is often too complicated to pursue.

"Each rebate often requires separate mailing and different proofs of purchase," notes Dworksy. Often, the consumer doesn't realize multiple copies of the receipt or proof of purchase are needed until it's too late.

Rebates on a Debit Card

Lately, many companies have begun sending rebates that are pre-loaded on debit cards, which can be inconvenient and confusing.

"Because these cards come with expiration dates, the companies can plan when they can return that income on their balance sheets," says Christopher Grande, a principal with Walnut Hill Advisors, LLC. Grande has first-hand experience, having recently lost nearly half of a $100 rebate card when he forgot to use the balance before it expired.

The rebate cards also sometimes have maintenance fees or other charges that reduce the benefit.

Plus, many customers who are expecting a traditional paper check rebate in the mail may throw the debit card away, mistaking it for a pre-approved credit card offer.

Hard-to-Access Required Documentation

"Sometimes the proof of purchase is hard to get at," says Dworksy. "It could be under a hard clamshell plastic package, for instance. Or it could be the inside flap of a box, where a customer is not used to looking."

The buyer may unwittingly damage or tear the proof of purchase while opening the package or may throw it away without realizing it.

Complicated, Time-Consuming Processes

"If you don't read the fine print and follow all the instructions, your rebate is denied," says Erin Edwards of FunWithFreebies.com. "Companies are counting on the fact that some people will abandon the rebate process entirely or make mistakes when filling out the form. They also add very specific instructions and hope you will not notice the fine print or deadlines for submitting the rebates."

40%-60%

The percentage of rebate offers that are never fulfilled.

Another popular tactic: an extremely short rebate redemption period, causing consumers to miss the deadline if they don't submit the forms immediately.

Counting on Forgetful Consumers

The company is betting on the fact that you won't notice If the rebate simply never arrives. "Sometimes the manufacturer delays paying the rebate fulfillment house, and the consumer simply forgets after eight weeks that they are even owed money," says Dworksy.

How to Avoid Losing Out

To make sure you get the rebates you're entitled to, be careful to read all the fine print, submit all the required paperwork quickly, make copies for your records, and follow up if you don't receive your rebate in a timely manner.

And the next time you are shopping, make sure you consider the hassle of handling a rebate claim before you purchase that item.